News Articles

Posted on June 29, 2011

By John Rossomando

ObamaCare’s implementation is causing many employers across the country to think twice about hiring as they consider the impact of its rules and regulations.

More than 3,500 pages of regulations have been penned since the law passed last March, and their impact is already being felt.

“I know for a fact that the mandates in ObamaCare are discouraging the creation of new jobs,” said Tennessee GOP Sen. Lamar Alexander, the third-highest-ranking member of the Senate Republican leadership. “And I will be specific. I met with the chief executives of the chain restaurants in America, who are the largest employer in America after the federal government—especially of those who are low-income.”

One of the companies Alexander spoke with told him that the regulatory changes that followed ObamaCare’s passage ate all of its profits from last year, while another company said it slashed its workforce from 90 employees down to 70 per store.

“There’s no doubt that ObamaCare is causing our country to lose jobs, and millions of Americans have higher costs and will lose the policies they now have,” Alexander said.

Businesses are uncertain about the costs and the regulations they face, and many are finding it is cheaper to hire part-time workers to get around having to offer health insurance to their employees.

“The overall regulatory burden falls hard on small businesses that have seen their health care premiums increase by more than 10% under ObamaCare,” said Rep. Joseph Pitts (R.-Pa.), chairman of the House Energy and Commerce Committee’s subcommittee on health. That trend is unlikely to end anytime soon, because costs are expected to increase further in 2014 once the employer mandate takes effect in 2014. It will require all employers with 50 or more workers to provide health insurance for their employees that matches up to a federally mandated list of coverages, which will drive up costs.

According to Congressional Budget Office (CBO) estimates, employers will likely face nearly $52 billion in tax penalties between 2014 and 2019, which Brian Blasé of The Heritage Foundation says will “reduce business growth and hiring.”

The same CBO report found that approximately 650,000 mainly lower-paid and lower-skilled workers could find themselves out of a job as a result of the health care law’s implementation during the second half of the decade.

“There’s a lot of uncertainty among employers about the increasing cost, and a lot of them are seeing that it is cheaper to hire part-time workers,” Pitts said.

Pitts sees particular problems for smaller businesses that will be hit harder by the law’s regulatory bite than larger business that are flush with cash. “I believe you can’t put a mandate on a business like ours unless you know that an industry can actually pay for it, and without a doubt, this industry cannot pay for it,” Scott Womack, who owns 11 IHOP restaurants in the Midwest, told The Heritage Foundation in a video interview. “This legislation is going to cost anywhere from $7,000 to 10,000 per employee. … We’re going to have to take drastic actions to trim employees' hours down, to trim services, look at cutting a lot of things that we pay for now to make room for this.”

Obama has routinely cited his Big Government programs as job boosters, having promised that we would have 6.8% unemployment by now. The unemployment rate currently stands at 9.1%, with no ease in sight.